Recently President Biden signed two bills into law that impact the reporting requirements and penalty provisions for employers and health insurance providers that provide minimum essential health coverage under the Patient Protection and Affordable Care Act. Key changes include:
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Employers and health insurance providers are only required to furnish 1095-B and 1095-C to covered individuals if the covered individual requests it, provided that the employer or health insurance provider meets certain other requirements for providing notice to recipients. Generally, the employer/ health care provider must post a notice to their website detailing the recipient’s right to request a copy. The notice must be posted in the time and manner required by the IRS , and if requested, the employer / health care provider must provide a statement by the later of January 31 of the following calendar year , or 30 days after the request. The IRS already permits this method of furnishing for 1095-B (and certain 1095-C) recipients. The new law extends this method of furnishing to all 1095-C recipients. See “Alternative Manner of Furnishing Statements” of the 1094-B and 1095-B Instructions and 1094-C and 1095-C Instructions for a detailed explanation of the current IRS requirements for posting notice.
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Employers and health insurance providers may report date of birth for a covered individual when a tax identification number (TIN) is not available. The IRS already permits this flexible TIN reporting for 1095-B and 1095-C.
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Employers and health insurance providers may furnish 1095-B and 1095-C electronically. The IRS already permits 1095-B and 1095-C to be furnished electronically.
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Employers and health insurance providers have 90 days to respond to Letter 226-J for a proposed assessment for failure to offer minimum essential coverage. The IRS currently only provides a 30-day window to respond.
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A six-year statute of limitations applies to the penalty for failure to provide minimum essential coverage.
The 1095-B/1095-C distribution and reporting changes are effective for tax year 2024 statements furnished to recipients and filed with the IRS in 2025. The IRS has not yet published guidance reflecting this change.
The text for the new laws can be found here and here. For IRS requirements regarding posting notice, see the 1094-B and 1095-B Instructions and 1094-C and 1095-C Instructions.
